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US job market looks solid 8 years after recession ended


While the unemployment rate fell slightly to 4.3 percent, that drop is more accurately a reflection of a weakening job market.

USA employers added 138,000 net new jobs to the rolls last month, below forecasts for 185,000 jobs, data from the Bureau of Labor Statistics showed Friday.

Total nonfarm payroll employment increased by 138,000 in May, compared with an average monthly gain of 181,000 over the prior 12 months.

"I wouldn't worry too much about monthly payrolls", Jim O'Sullivan, chief United States economist at High Frequency Economics in Valhalla, New York, said before the report.

Economists surveyed by CNNMoney predict the USA added 179,000 jobs in May and that the unemployment rate remained at 4.4%, its lowest level in a decade. The labor-force participation rate fell to 62.7% in May from 62.9% in April.

A one- or two-month drop in the labor force isn't necessarily cause for alarm.


"We're in a mature phase of the cycle, job growth is going to slow down". He said some of the slowdown came as some employers had trouble finding workers with the right skills. Therefore, the data add fuel to the idea America's labor market is near full employment - an important factor for the Federal Reserve as it continues on its path to normalizing monetary policy. But slowing hiring and softer inflation readings may give some officials pause.

Additionally, the Bureau of Labor Statistics reported that the net jobs number for March was revised downward from +79,000 to +50,000 and that the number for April was revised downward from +211,000 to +174,000 for a net revision for these two months of -66,000 jobs. Month-after-month job gains in the 200,000 range are not sustainable longer term. With the recovery from the Great Recession having reached its eighth year, hiring is gradually weakening.

"Given reports that job openings are near all-time highs, it suggests that businesses are struggling to fill these positions", said Beth Ann Bovino, U.S. chief economist for S&P Global Ratings. Trump said the deal would have been bad for American workers.

Average hourly earnings rose 4 cents or 0.2 percent in May after a similar gain in April, leaving the year-on-year increase in wages at 2.5 percent. Data on consumer spending and manufacturing have offered hope that growth picked up early in the second quarter after gross domestic product increased at a tepid 1.2 percent annualized rate at the start of the year.

Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.

While the job gains could still be sufficient for the Federal Reserve to raise interest rates this month, the modest increase could raise concerns about the economy's health after growth slowed in the first quarter. The U-6 has plunged since January to 8.6 percent in April, a 0.8 point decline.

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